Harvard Business Review

MAY 2, 2013

The key components that lead to a solution are as follows: Understand the dynamics of a high fixed cost/low variable cost industry. While pharma companies spend billions on research, the actual cost of manufacturing a treatment (such as a pill) is minimal. This cost structure enables pricing flexibility.

Variable Costs 10

Variable Costs Fixed Costs Cash Flow Revenue 10

Harvard Business Review

MAY 8, 2012

Bharti's innovative business model converted fixed costs in capital expenditure to a variable cost based on usage of capacity. Through the outsourcing arrangements, Bharti dramatically lowered its costs while ensuring high quality for customers, since vendors had world-class competencies in their domains.

Balance Sheet 12

Balance Sheet Variable Costs Telecommunications Fixed Costs 12

Harvard Business Review

JUNE 4, 2015

Since theme parks are high fixed cost/low variable cost entities, revenue from discount-enticed new customers is virtually all profit… free money. By offering deeper discounts on off-peak days, customers who otherwise would not have enjoyed Disneyland could now do so. This would result in growth.

Variable Costs 12

Variable Costs Fixed Costs Implementation Travel 12

Harvard Business Review

AUGUST 3, 2018

It failed to meet its revenue and subscriber growth targets. Information on revenue and its drivers are, without doubt, the digital companies’ most value-relevant disclosures from the investors’ perspective. The company’s first revenues indicate the acceptance of its product or services by customers.

Variable Costs 8

Variable Costs Revenue Assets Cash Flow 8

Harvard Business Review

SEPTEMBER 25, 2012

In a lengthy article on these solar entrepreneurs, The New York Times recently reported that Sungevity, for example, has seen its revenues explode 16-fold in just two years. The cost of using renewable energy, either through power purchasing agreements that cost nothing up front or through direct investment, is dropping fast.

Energy 10

Energy Variable Costs Media Revenue 10

Harvard Business Review

APRIL 5, 2013

Dynamic pricing makes sense for baseball as it shares key qualities that have enabled other industries (airlines, hotels, and rental cars) to prosper from this strategy: fixed capacity, low variable costs, and a "product" that expires at a certain time. Just as important, revenue doesn''t solely come from ticket sales.

Variable Costs 8

Variable Costs Travel Revenue Sales 8

Harvard Business Review

OCTOBER 25, 2017

Selling products limits the revenues you can make from clients: Unless you are innovating and continually updating your product offering, customer attrition tends to be high, and incentivizing repurchases can be hard. Working in projects throughout my career, I have identified these as the important ones: Revenue streams.

Revenue 8

Revenue Variable Costs Sales Sales 8

Harvard Business Review

MAY 18, 2018

per month per subscriber, and three movie tickets costs nearly $30, on average, meaning it’s losing nearly $20 per month per subscriber on a variable cost basis. Concessions are nearly pure profit and the most impulse-driven, expandable piece of a theater’s revenue.

Advertising 8

Advertising Variable Costs Revenue Operations 8

Harvard Business Review

OCTOBER 11, 2017

Financial measures report variable costs broken out by a few major categories (including supplies, drugs, and staff) along with revenue and margin measures. The clinical team works together with finance and quality-measurement staff to update this box score every week.

Manager 8

Manager Hospitality Variable Costs Implementation 8

Harvard Business Review

FEBRUARY 22, 2011

As each of these companies expands its fixed-cost infrastructure, profits grow geometrically because the additional variable cost of adding each new user is near zero. Adding a profile on Facebook has little to no impact on Facebook's operating costs. Greater scale bestows greater competitive advantage.

Advertising 16

Advertising Variable Costs Scaling Media 16

Harvard Business Review

MAY 9, 2013

When one person with a wireless connection can be an agency, a media company, or even a manufacturer, traditional advertising organizations have to change their culture, processes, structure, talent policies, resources, and even their business and revenue models in order to embrace the power of open systems being fueled by digital connectivity.

Advertising 13

Advertising Variable Costs Media Fixed Costs 13